Ad technology company Engage announced on Thursday that it and its U.S. subsidiaries filed for Chapter 11 bankruptcy and struck a deal to sell its assets to Scene7 in a deal worth up to $2 million.

The Andover, Mass., company said Scene7 agreed to purchase all of Engage's assets for $1.2 million in cash and the assumption of liabilities worth from $650,000 to $850,000. Engage said it does not expect shareholders to recover anything.

Scene7, a San Francisco-based dynamic imaging software company, will gain control of Engage's advertising, marketing and promotion software and services. The company said it planned to hire some Engage employees to support the software. Scene7 said it would package together Engage's offerings, which include Engage For Retailers, PromoPlanner, and ContentServer, with its own Infinite Imaging Platform to sell to newspapers, agencies and retailers

The bankruptcy filing came after Engage's former parent company and incubator CMGI agreed to allow the company to use its cash collateral to fund the bankruptcy operations. CMGI, which sold off its stake in Engage last June, had final say over the matter as the company's secured lender.

Two days ago, Engage declared itself insolvent and said it would seek Chapter 11 protection.

The asset sale is subject to a bankruptcy court's approval, which Engage anticipates will occur by the end of the summer.

During the reorganization period, Engage plans to continue to fund its employees' compensation and benefit plans, maintain its operations, and make payments to suppliers.